Domain Pricing Strategy

Determining how to price your domain can be a complicated process. In this section, we will be breaking down domain sales trends from the past few years based on TLD as well as how to find what similar domains have sold recently.

Appraisals

There are countless factors used to determine the value of your domain name: google traffic, marketing potential, etc. A specific example of this is that the most expensive domain sold in 2021 was Christmas.com. Firstly, this is due to the fact that this keyword is widely used. Secondly, it is in high demand for entrepreneurs. Thirdly it has a high search rate across search engines.

Exact-match domains are a gold mine for any domain seller. Most businesses try to make websites based on their name. Owning a domain that's an exact match to what an aspiring entrepreneur wants puts you in the ideal spot to negotiate pricing. Keep in mind that some domains are trademarked, and you can run the risk of trademark infringement. Check out our trademark infringement blog for more information.

One way to get an accurate read on the value of your domain is to get it professionally appraised. There are various free appraisal services available like Estibot, Valuate.com, Sedo.com, Flippa. You can use these sites to determine your domain's market value.

Domain Broker

Domain Brokers are individuals who can track down the owner of the domain name and make offers to buy it on your behalf.  The advantage here is that domain brokers like Sedo will do their best to secure high prices because they have a vested interest in each sale. Another great benefit of connecting with a broker is that they will help domainers monetize from direct navigational traffic. 

Brokers Fees 

Buyer brokers typically charge around 10-20% of what they managed to sell your domain for. So, they will earn more if your domain sells for more. The pressure to make a good sale is on the brokers’ side since most don’t relieve payment until the domain is sold.

Negotiations

First Offers

When potential buyers are first interested in your domain, they typically let you know what their budget for this purchase is.  More often than not, this suggested budget is typically a lowball offer. Negotiation is always an option to drive up your sales price.

Know When You’re Wasting Your Time

The most important part of the negotiation is knowing when you’re wasting your time. It’s essential to know which buyers to entertain and which ones to reject. For example, if your buyer's lowball price is closer to the asking price you are expecting to sell the domain for, negotiating with them would be a good use of time. However, if your selling price is $12,000 and the buyer only offers $1,000, then negotiation may be pointless.

Wide price gaps aren't the only red flags when it comes to negotiation. Others include endless bargaining, arguing, etc. 

Who is Your Buyer

When it comes to setting prices, your strategy is completely dependent on who your buyer is. Discovering their identity gives you immense leverage in your negotiations. Unlike the ease in identification that the buyer experiences when performing a whois search, discovering your buyer's identity is not an easy task. 

Buyers today use safe email addresses, use only their first names, and refrain from divulging too much about their backgrounds to sellers. This is an attempt to cloak the actual spending capacity of the buyer. For example, if you know the buyer represents a wealthy company, you will want to sell your domain for a higher price than what you’d sell to an individual buyer. Be careful when researching, though, so your prospective buyers won’t feel that you’re invading their privacy.

Types of Pricing Strategies

When it comes to determining your domain name’s best pricing strategy, there are tons of options.

Cost-Based Pricing

The most basic strategy is cost-based pricing. This method requires you to write down domain registration in your portfolio and then set a target profit margin for each of those products. The formula is as follows: 

(domain registration cost  + overhead cost) x (1+ Markup) = Price

For example, let's say you are selling domain.net. The initial cost was $1.00. Then you factor in $.88 in transfer and processing fees and you want to include a 10% mark up. Your equation would look like this:

(1.00+ .88) x (1+ 10%)= Price

Price = $2.06

Market-Based Pricing

Every domain investor knows that the most important thing to know when selling your domain is the different pricing of your competitors. Consumers care deeply about the price, and they compare prices all the time.

Pursuing a competitive pricing strategy doesn’t mean undercutting your competitors and lowering your prices until your margins are nearly nonexistent. It carries the risk of racing to the bottom, which is detrimental to everyone.

The most beneficial yet often forgotten effect of market-oriented pricing is that it sometimes grants companies exceptional price increase opportunities, where you can increase profits while still holding a competitive edge.

For example, in 2017 crypto.com sold for somewhere between $5-$10 million USD. Due to the insanely large markup of this domain competitors were able to sell their similar domains for lower yet still inflated prices. Eth.com, for instance, sold for $2 million USD. 

Domain Trends

A crucial part of pricing your domain is knowing what the rest of the market is pricing their domains at. 

Top 10 Keywords Searched 2021

1. NFT
2. Pics
3. Timemanagement
4. Gambling
5. Meme
6. Kids
7. Pure
8. Luxury
9. Sale
10. Meta
    

Top Domains Sold in 2021

1. Christmas.com- $3,150,000 
2. Angel.com- $2,000,000 
3. Exodus.com- $1,945,000 
4. Meme.com- $1,250,000 
5. eBike.com- $1,008,900 
6. SelfMade.com- $977,500
7. Recursion.com- $904,000
8. GoBet.com- $850,000 
9. Tattoo.com- $812,000 
10. Poker.net- $750,000 

As displayed above, the most valuable TLDs are .com domains, the next most valuable being .net. For more TLD value information, check out our Domain valuation blog.

How Can Sav Help

Still, struggling to price your domain? Check out our domain marketplace to compare the active auction prices of major TLDs.